Netopia Reports Third Quarter Results for Fiscal Year 2005

Revenues for the third fiscal quarter ended June 30, 2005 were$27.8 million, a 9% increase from $25.4 million for the same period inthe prior fiscal year. Net loss for the third fiscal quarter in boththe current and the prior fiscal year was ($2.3) million or ($0.09)per share.

"Led by broadband equipment quarterly revenues growing 15%year-over-year, we are pleased with our achievements this quarter,"said Alan Lefkof, Netopia's president and CEO. "The broadband marketis changing dynamically as leading telecommunications carriers aredesigning new initiatives with combined data, voice and video servicesthat can be remotely provisioned and managed. Netopia believes thatour recently announced MiAVo gateway product suite and our NBBSsoftware for gateway remote management give us competitive strength tohelp our telco customers launch these new high bandwidth 'triple play'services."

Note:

Netopia will host a conference call to discuss its results for thethird fiscal quarter ended June 30, 2005. The conference call willtake place on Tuesday, July 26, 2005 at 5:00 p.m. Eastern time (2:00p.m. Pacific time). The conference call will be broadcast live on theInternet and can be accessed by visiting Netopia's web site atwww.netopia.com. To join the telephone conference, dial (913) 312-1277and enter the pass code 4190868.

An archived recording of the conference call will be available onNetopia's web site for one year, and by telephone from July 26 -August 2, 2005. To listen to the archived recording, dial (719)457-0820 and enter the pass code 4190868, or go to Netopia's web site.

About Netopia

Netopia, Inc. is a market leader and innovator in broadbandcustomer premise equipment, remote management software and broadbandservices. Netopia offers carrier-class wired and wireless modems,routers and gateways. Netopia gateways serve markets from residentialthrough enterprise-scale distributed businesses, and enable broadbandaccess for voice, video, data and other services. Netopia's Wi-FiCERTIFIED(TM) gateways feature 3-D Reach(R) technology for enhancedwireless range, security, and performance. Netopia's remote managementsoftware enables service provisioning, monitoring and remote controlfor broadband gateways and personal computers, and is designed to meetthe requirements of a full range of users: individual-to-individual,carrier-to-customer, and help desk-to-users. Netopia's broadbandservices include Wi-Fi hotspots for local and nationwide networks ofsmall venues, web site and remote control service hosting, andparental controls. Netopia has established strategic businessrelationships with leading carriers and broadband service providersincluding Belgacom, BellSouth, Covad Communications, EarthLink,eircom, Hong Kong Telecom/PCCW, MegaPath Networks, Netifice, SBCCommunications, Swisscom, and Verizon.

Headquartered in Emeryville, California, Netopia's common stocktrades on the pink sheets under the symbol "NTPA.PK." Furtherinformation about Netopia can be obtained via phone (510) 420-7400,fax (510) 420-7601, or on the web at www.netopia.com.

Safe Harbor Statement under the Private Securities LitigationReform Act of 1995:

Portions of this release that are not statements of historicalfact may include forward-looking statements. Statements regardingNetopia, Inc.'s beliefs, plans, expectations or intentions regardingthe future are forward-looking statements, within the meaning ofSection 27A of the Securities Act of 1933, as amended, and Section 21Eof the Securities Exchange Act of 1934, as amended. All suchforward-looking statements are made pursuant to the safe harborprovisions of the Private Securities Litigation Reform Act of 1995.These forward-looking statements include statements concerning productdevelopment, anticipated new products and customers, growthopportunities, and future operating results. Netopia's actual resultscould differ materially. Factors that might cause a differenceinclude, but are not limited to: Netopia's continued ability to formkey relationships for our broadband products and services; Netopia'sability to enter into new distribution partnerships; Netopia's abilityto develop new broadband products and services in a timely manner;market acceptance of Netopia's broadband products and services;Netopia's ability to list its common stock on a Nasdaq Stock Market;Netopia's ability to resolve pending private securities litigationarising out of the restatement of Netopia's consolidated financialstatements in a timely and economic manner; Netopia's ability tocomplete the proposed settlement with the Securities and ExchangeCommission relating to the restatement of Netopia's consolidatedfinancial statements; the pace of development and market acceptance ofNetopia's products and the market for broadband products and servicesgenerally; the highly competitive nature of Netopia's markets andcompetitive pricing pressures; the uncertainties associated withinternational operations; intense competition from third partiesoffering competitive broadband products and services; and economicconditions generally. In addition, prior period-to-period comparisonsof revenues are not necessarily indicative of period-to-periodcomparative revenues in future periods. Prospective and currentinvestors are cautioned not to place undue reliance on anyforward-looking statements. Further, Netopia expressly disclaims anyobligation to revise or update any of the forward-looking statementscontained herein to reflect future events or developments after thedate hereof. Netopia does not undertake to update any oral or writtenforward looking-statement that may be made by or on behalf of Netopia.For more information concerning Netopia and risk factors that mayaffect Netopia's future results and may cause actual results to varyfrom results anticipated in forward-looking statements, including riskfactors relating to securities litigation arising out of therestatements described in Netopia's Annual Report on Form 10-K for thefiscal year ended September 30, 2004 and the formal investigation bythe Securities and Exchange Commission to determine whether anyfederal securities laws may have been violated, investors shouldreview Netopia's public filings with the United States Securities andExchange Commission, which are available by calling Netopia at (510)420-7516 or online at www.sec.gov.

All company names, brand names and product names are trademarks oftheir respective holder(s).


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
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Three months ended Nine months ended
June 30, June 30,
------------------- -------------------
2004
2005 2004 2005 (Restated)(1)
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(in thousands; except per share amounts)

REVENUES:
Broadband equipment $25,103 $21,891 $73,547 $63,426
Broadband software and
services 2,726 3,543 8,823 12,074
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Total revenues 27,829 25,434 82,370 75,500
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COST OF REVENUES:
Broadband equipment 18,655 16,757 54,907 45,780
Broadband software and
services 489 267 1,139 706
Amortization of acquired
technology 300 300 900 900
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Total cost of revenues 19,444 17,324 56,946 47,386
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GROSS PROFIT 8,385 8,110 25,424 28,114
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OPERATING EXPENSES:
Research and development 3,400 3,846 10,009 11,854
Selling and marketing 4,582 5,199 14,249 15,262
General and administrative 2,561 1,184 6,785 3,591
Amortization of intangible
assets 86 86 259 259
Restructuring costs -- -- 98 --
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Total operating expenses 10,629 10,315 31,400 30,966
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OPERATING LOSS (2,244) (2,205) (5,976) (2,852)

Other income (loss), net (44) (52) 259 193
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Provision for income taxes 24 19 68 65
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NET LOSS $(2,312) $(2,276) $(5,785) $(2,724)
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Per share data, net loss:
Basic and diluted net loss
per share $ (0.09) $ (0.09) $ (0.23) $ (0.12)
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Shares used in the basic and
diluted per share calculation 25,215 24,033 25,000 23,247
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(1) See Netopia, Inc. Annual Report on Form 10-K for the fiscal year
ended September 30, 2004 for a description of the restatements of
financial results for prior periods.



CONDENSED CONSOLIDATED BALANCE SHEETS


June 30, September 30,
2005 2004(1)
(Unaudited)
----------------------------------------------------------------------
(in thousands)
ASSETS
Current assets
Cash and cash equivalents $22,825 $23,973
Trade receivables, net 18,345 17,812
Inventories, net 5,543 6,280
Prepaid expenses and other current assets 975 1,226
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Total current assets 47,688 49,291

Furniture, fixtures and equipment, net 2,631 2,694
Intangible assets, net 4,449 5,684
Equity investment 1,032 1,032
Deposits and other assets 525 886
----------------------------------------------------------------------
TOTAL ASSETS $56,325 $59,587
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $19,266 $18,051
Long-term liabilities 389 406
----------------------------------------------------------------------
Total liabilities 19,655 18,457

----------------------------------------------------------------------
Stockholders' equity 36,670 41,130
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TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $56,325 $59,587
----------------------------------------------------------------------

(1) Derived from the audited consolidated balance sheets dated
September 30, 2004 included in Netopia, Inc.'s 2004 Annual Report on
Form 10-K for the fiscal year ended September 30, 2004.